I'm the author of the new book, “Pound Foolish: Exposing the Dark Side of the Personal Finance Industry,” which was published by Penguin’s Portfolio imprint in January of 2013. I like to write and report on subjects where life meets money: that can be personal finance, parenting, women's issues, politics, education or career advice. Yes, I'm capable of merging them all in a single post. My goal is to surprise you, provoke you, and make you see the world in a different way. My last book was on office romance and why it works. Really. Want to get in touch? Give a holler at helaine.olen@gmail.com or follow me on Twitter @helaineolen.

Post Your Comment

Post Your Reply

Forbes writers have the ability to call out member comments they find particularly interesting. Called-out comments are highlighted across the Forbes network. You'll be notified if your comment is called out.

Comments

“Why not have employers first help their employees set up a real emergency savings account before addressing retirement savings? Putting money aside for retirement while shortchanging emergency monies is like building the second floor of a house while ignoring the foundation.”

Why is the employer even involved in this hypothetical in the first place? Employees — individual people — can take responsibility for their own cash flow. “Not knowing” that you’ll need money after you stop working is the most ridiculous thing I’ve ever heard.

And just funding an emergency account — say, $5,000-$20,000 — isn’t going to be enough anyway.

Personally, my 401K has remained puny because 1. companies used to have a waiting period for participation and 2. I’ve been working in an industry where a fair amount of job-hopping (the only way to get a real raise) and frequent layoffs are the norm. Hence, I would get into a job, the waiting period would pass, I would join the 401K, and then all hell would break loose–new management, sudden account loss, “restructuring”–and I would lose the job. Then it might take me quite awhile (years) to land another full-time job with a 401K, where I would have to get through the waiting period before finally joining the 401K. Rinse and repeat. In the interim, I was freelancing, had intermittent income, and thus not in a position to sock money away in a retirement account. In contrast, my husband has worked for the same company for many years, and he did rack up a pretty substantial retirement account. I think that the insecure nature of employment has a lot to do with the outcome of 401ks. Also, the whole company match thing is kind of bogus, because in tough times like today and, well, practically every year in recent memory, many companies suspend or severely cap their contributions. I have also experienced that: “Sorry, this year we are in a difficult business environment so we are suspending the company match.” And of course, there is a vesting period for company contributions. In an inherently volatile industry (mine is advertising) many people are not able to keep a job long enough to be fully vested in the company contributions that are so highly touted by the finance gurus (“Don’t leave money on the table! My number 1 recommendation: put the max into your 401K!”) These accounts are not the answer.

As grim as your situation appears to be, the good old days weren’t so good. In the 1970′s and early 1980′s, the vesting period to accrue any pension benefits at all in a company’s pension plan was typically 10 years. In my first 11 years of employment, I ended up accruing zero pension benefits.

Forget about the Latte Factor. If you try to click on it and you have MacAfee software, you will get a site advisor warning.

For many Americans, their 401K plan, as bad as it may seem, may be the only savings vehicle they use. At least they should get to know the choices and fees in their plan. They should compare them to what is offered by a low cost competitor such as Vanguard.

If your employer offers a 401K with little or no match and high fees, you might find it more cost effective to set up a low cost IRA on your own. At least one large financial institution was sued for offering its own mutual funds in its employee 401K plans instead of third party funds with lower fees. It settled out of court.

Another element to this story is the psyche imparted to past generations, that ingrained the idea into our brains, that Americans are “entitled” to a pension. Meaning that if we work enough years with a specific company, that company would then be obligated to continue to pay us for not working for as long as we live.

We simply “assumed” that our “pensions”, combined with our Social Security benefits, would allow us to play golf, travel or what-have-you perpetually with little or no concern about tomorrow. By the time management collectively discovered that pensions were a sure-fire formula for the imminent demise of just about any company and started implementing alternative retirement policies, the damage had been done.

Saving was no longer a prioroty.

I mean, “Why bother” saving when all the money we are going to need to retire comfortably is going to come rolling our way when we reach 65 or so?

Of course, the Federal Govt. as well as most municipalities still offer old-time pensions but these too will prove to be unsustainable and a drag on future economic stability and expansion.

I really despise when people use a word with really nasty negative connotations to mean something which isn’t nearly as bad.

“Blaming the victim” usually refers to victims of RAPE who are blamed because of how they dressed or acted or where they were. You use it to describe people who don’t have money saved because they didn’t save money.

Here’s me preaching at you- I put away 15% plus of my income in my 401k. 10% is from me, 5% from my employer. I don’t pay a dime for TV, and my phone plan is Republic Wirelss- $20 / mo. I didn’t have a smart phone before that you know why? Too expensive.

I also give away upwards of 25% of my paycheck.

I am very much middle class, but live comfortably because we make sure we live below our means.

WRONG WRONG. US has structural problems, which structural problems Republican champion, again Republicans champion these problems, proving what TRUE enemy of American people they are.

And which problems Obama Admin talked about, but DID NOT address AT ALL, proving what HOAX it is. Or it did not address them because the right-wing Cabal (aka Wall Street gang) behind the Republican lunatics, controls most of the US Media and thus lied and lied, to ensure that these structural problems are not addressed which problems put few EXTRA TRILLIONS Dollars per year in their pockets, which problems are:

1- Lack of essential Socialized services such as Universal Nationalized health care (aka NHS), something that would SAVE the US 50% on cost of health care, while giving health care to all, and that is WHY all Conservative parties, repeat for Republican lunatics, ALL Conservative parties, in Europe, Canada, Israel, etc. are 100% for their NHS

2- Our Taxes wasted on one War after another War and a Gargantuan Military

I guess I was lucky to grow up in a large household (8 kids) with very little disposable income. With 18 years of frugal on-the-job training; I have found it rather easy to live within my means (which have fluctuated significantly) and to put money away for rainy days and retirement. Most of my peers consume way too much of their paycheck – they too think find those who preach responsible spending “tiresome”. And most of them are living the no-savings nightmare you describe.

Don’t blame the well-dressed messenger if you don’t like the message. The honest fact is most Americans over-consume and under-save.

That’s true, but there is an army of parasites of various sorts in our economy, whose job it is to wheedle, threaten, and banboozle the public into wasting its money on a huge variety of worthless or overpriced products and “services.” Our economy and political system seem to be structured to futher impoverish those of us at the bottom of the economic pyrmid. Remember that loan sharking was once illegal. Now the “payday loan industry” flourishes on every street corner.

I was one of these, but that is pretty much what society has taught us. The so-called gospel of conspicuous consumption may be on the wane, but there has to be a reason that every day after Thanksgiving the folks flood the shopping areas before the crack of dawn. And, though your approach is noteworthy indeed, I can’t help but wondering if you were able to cover emergencies such as car and home repair without trauma.

One might be tempted to blame the current state of the economy for the low savings rate, but the savings rate in the U.S. has been declining for decades. Today people are raiding their 401(k)s to pay rent. Six years ago they were taking out home equity loans to buy vacations, cars and luxury items.

Americans anticipate Social Security, equity and DBs for their retirement. Taking personal responsibility is a thing of the past.

If you think Bernard`s story is unimaginable…, 4 weaks-ago my sisters mother in-law basically also recieved a check for $7525 working seventeen hours a week from there house and their neighbor’s mother-in-law`s neighbour has done this for three months and easily made more than $7525 part-time on there pc. the guidelines from this address… http://goo.gl/Hg6ks

Regrettably Helaine the US currency is due for a replacement later this year. This will happen in the fall and will effect 401k’s and any savings held anywhere. This is why the price of gold is so high and will continue to climb. The best advice is to pay down debts and live within your means.

Every where I have worked I always participated in the 401k programs because I consider the matching funds free money. I was always active in my allocations and use the matching funds portions to invest in aggressive vehicles, because ass free money, if I lose that portion I got it free. Thus about 1/3 of my portfolio was always in emerging market funds. I was a net winner, but I also looked upon investing, that the greater the risk, the greater the rewards.

Because of the recession and the rising unemployment, you won’t be expecting people to save when they don’t have enough money spend for their needs. Yes, retirement is something that we all have to prepare for, but then how saving for it is not your priority when your bills for the moth are there needing urgent payment. Your right, we really need to save but to be able to do that, we need to work and earn harder.

Unfortunately, Danielle, you hit the nail right on the head. We live in very tricky times, and keeping cool when the heat is on is today’s challenge. But it now seems as if the heat will never be turned off. Society is definitely out of balance today, and the multi-tasking craze has left so many burned out. It would be much saner to take a few deep breaths and tackle one thing at a time. This country may have been founded on the principle that you have to pull yourself up by the bootstraps and make your own breaks, but in today’s world when all but the top 5 percent or so have the deck stacked so heavily against them, it is so much easier said than done. For example, at 68 I am no doubt unemployable by much of the employment world’s standards even though age discrimination laws technically remain on the books. Have been trying to launch a career as a writer but have been unable to secure funding for project promotions and so on and so on. But I will suggest looking into my new novel. JUDAS TIMES SEVEN is an expose on the dark side of office politics, which in and of itself makes things so much tougher for so many of us.